The design and application of soft nanocomposite injectable hydrogels containing entrapped microgels for small-molecule drug delivery is demonstrated. Copolymer microgels based on N-isopropylacrylamide and acrylic acid were synthesized that exhibited both ionic and hydrophobic affinity for binding to bupivacaine, a cationic local anesthetic used as a model drug. Microgels were subsequently immobilized within an in situ-gelling hydrogel network cross-linked via hydrazide-aldehyde chemistry to generate hydrogel-microgel soft nanocomposites. Drug release could be sustained for up to 60 days from these nanocomposite hydrogels, significantly longer than that achievable using the constituent hydrogel or microgels alone (<1 week). Drug release kinetics could be readily tuned by varying the affinity of the microgel and hydrogel phases for drug-polymer interactions and the. network density of the hydrogel phase.